Based On The Economic Effects Of Trade In Goods, China - Asean Free Trade Area

China plus ASEAN Free Trade Area(shorted for CAFTA)is the first regional economic integration organization that China joined formally after its entry into WTO, which is also a regional organization consisting mainly of developing countries. Its economic effect and prospect are the objectives we care about very much and the paper will focus on.On theoretical frame and realistic foundation, the paper focuses on the economic effect of CAFTA from the perspective of merchandise trade, including static economic effect and dynamic economic effect. On the basis of analysis of realistic trade foundation between China and ASEAN countries, employing several models ,such as Balassa model, Chapter Three focuses on the empirical studies of Trade Creation Effect, Trade Diverting Effect and Trade Reorientation Effect. The empirical results reveal that the establishment of CAFTA will enlarge the intra-regional trade and partially optimize the trade structure in the FTA. However, CAFTA trade cooperation contributes limitedly to the increase of intra-regional trade and hardly changes the foreign trade flow of CAFTA members, in addition, it contributes more to the trade growth of ASEAN countries than that of China. There exists limits of static economic effect in the regional organization composed of developing countries, therefore, Chapter Four analyzes the dynamic economic effect of CAFTA, especially emphasizes the analysis of intra—trade industry by applying GL index, Which contributes significantly to the long-term development of developing countries.On the basis of summing up the main research conclusions, Chapter Five aims to explore the causes of the economic effects from the perspective of the complementarity and competitiveness of export merchandise between China and ASENA countries. Chapter Six puts forward the corresponding suggestions on the choice of the intra-regional strategy from the perspective of industrial strategy and foreign trade strategy.